Volume 36, Issue 9, September 2001

Speaking in One Voice
    An Exclusive Interview With Pilkington's Group Chief Executive Paolo Scaroni
by Debra Levy

 

Paolo Scaroni has a commanding presence. The 55-year old group chief executive officer of Pilkington plc immediately impresses visitors with his focus, intensity and a clearly articulated global vision for his company. 

I met with Scaroni on June 18 during an exclusive interview at Glass Processing Days in Tampere, Finland. Though we met at 10:30 in the morning, his staff allowed that they’d been on the move since 6 a.m. that day and had already visited one of Pilkington’s plants in the area. “I’m exhausted already and I haven’t had breakfast yet,” quipped one member of his group.

Pilkington is the behemoth of the worldwide glass industry. It manufactures both automotive and architectural glass in 25 countries throughout Europe, North and South America, Asia and the Pacific. The company has annual sales of approximately $4.5 billion USD.

In his time as group CEO, Scaroni has set about to meet Pilkington’s challenges by integrating a variety of disparate (and in some cases competing) companies into a single unified efficient one. What follows is Scaroni’s take on his company’s challenges and how he is meeting them.

SCARONI

Q—I guess I should start by asking what is new at Pilkington …

A—Well, we just did a full-scale launch of a great new innovation—first in Austria and then in the United States. It is Pilkington Activ™, the world’s only self-cleaning glass. We are launching it in the United States soon.

Q—Why did you choose to have such a big launch in the United States?

A—Because it makes sense. LOF, which Pilkington purchased some years ago, was the world’s leading innovator in curved windshield technology. Pilkington is a great innovator in all areas too, so it made sense that we launch it there.

Q—You mention the purchase of LOF by Pilkington some years ago. I know there’s been a lot of discussion of your desire to create one “Pilkington Worldwide.” Can you explain what you mean by this?

A—We want one Pilkington worldwide—whether you visit a plant in the United States or Europe or Asia, they should look and feel the same. Remember, at Pilkington the entire company is what it is as the result of acquisitions. 

Though we have grown by acquisition, we had not grown by integration. My predecessors did not try to integrate. They left each entity independent. We needed to integrate to be one, and we began a program to do so in 1998. It is almost complete. Today, we have one technology, one purchasing operation, one organization. Part of our progress has come from these synergies, because we have been able to take the best from all the companies we acquired and use it everywhere. We have one company that was the world leader in the technology of producing auto glass.

Q—You mean the former LOF?

A—Yes. We were able to take that technology and use it worldwide. It makes our whole company stronger.

Q—But, it is no secret that these are tough times for the automotive glass industry, especially in the United States. What are the biggest challenges you face there?

A—Well, right now the big challenge, the very big challenge, is breaking even. But we have been reorganizing and improving. We came back a bit last year under Warren Knowlton’s leadership and are starting to grow.

Q—Why have times been so tough in North American AGR?

A—We have a lot to deal with that’s unique. We have to deal with the truckload pricing issue and wholesaler margins. It has been very tough.

Q—Let’s talk a bit about Pilkington Activ™. How will it be distributed in the States?

A—The final decision about the way we are going to market has not been decided yet. (Editor’s note: Pilkington has since announced that 8 companies in the United States are distributing it. See USGlass, July 2001, page 24). In America, everyone wants an exclusive arrangement, on an exclusive basis. There are advantages and disadvantages to each and we haven’t decided yet.

Q—I am sure the United States presents some challenges for you. I had the privilege of interviewing Richard Karcher earlier this year …I read that...and I asked him about the feeling that some people convey about Pilkington in the United States. I would like to ask you about the same things. How do you respond to critics who say that Pilkington North America is not in control of its own destiny and that it is treated like a lesser child by upper management? Do you think these comments and criticisms are unfair?

A—They are unfair. Headquarters, as you say, and North America get along very well and work well together. But that being said, I will tell you that we need to centralize quite a bit. We need to completely centralize a set of decisions around a particular topic. We will not allow people to invest in technology on their own anywhere around the world. We need to have engineering decisions centralized, investment decisions centralized, purchasing decisions centralized and so on. We will have one competence center in every area. I give a high degree of freedom … but I give no freedom in terms of our trademark or trade products, especially with some brands.

In manufacturing, global competence and global benchmarking are important and Pilkington is not dissimilar from other companies.

Q—Did anything about LOF surprise you after you purchased it?

A—Well, we thought we knew how to make a float line, but they had some great technology, especially in automotive manufacturing. We’ve brought that into Pilkington worldwide.

Q—I know you worked at Saint Gobain for many years. How would you compare the two companies?

A—Saint Gobain is less a confederation of smaller companies joined together than Pilkington is, but it has a similar history—and an oligarchic mentality, if you will. However, Saint Gobain was much quicker than Pilkington to react to the influence of Guardian around the world.

Q—I’ve had many people tell me that the European manufacturers had no clue how to respond to Guardian when it began growing outside the United States … that they were in shock and didn’t know how to deal with them.

A—Saint Gobain reacted to the “Guardian shock” much more quickly than Pilkington did. Saint Gobain started benchmarking itself against Guardian earlier. They learned their lesson in the 1980s and 1990s. Pilkington watched the Guardian revolution and thought they could find other ways around it, other ways to compete.

Q—How do you compete against Guardian, or others for that matter, in the United States?

A—We are natural competitors, this is true, but we are very small in the commodity market. That’s why we continue to grow our complex [value-added] products. We see these products as our future. 

Q—Is there anything else you’d like to tell our readers?

A—Our North American business is doing better. The market is getting better and we will prove that we are more efficient than any other glass manufacturer … and Activ will revolutionize the industry.

Q—Thank you very much. 


Pilkington Launches World’s First Self-Cleaning Glass
Tuesday, June 26, 2001 marked Pilkington’s U.S. launch of the world’s first self-cleaning glass, which it calls Pilkington Activ™.
Pilkington Activ glass is a pyrolytic product that uses a two-part process to clean glass. First, it must be exposed to the sun’s ultraviolet rays for several days, which acts as a catalyst, breaking down organic dirt through a continuous and gradual photocatalytic effect. Second, the integrated coating reduces the surface tension of water on the glass surface, which is known as a hydrophilic effect. In this step, water sheets on the surface, preventing the formation of separate droplets and ensuring loose dirt and particles wash away with rain. 

In order to work, the Pilkington Activ coating must be placed on the outside glass lite, and can be used in tempered, laminated and insulating glass units. It is cut through standard float techniques. No edge deletion is required. It can be used with any type of framing material and the coating does not change the color of the glass. And, while Pilkington officials say it is possible to combine Pilkington Activ with other coatings, they must be placed on inboard lites. 

The product has been in research and development stages for almost four years, and was introduced on a test basis in the United Kingdom earlier this year. According to Jim Gildea, Pilkington’s director of marketing, Pilkington Activ was tested on homes in Ireland, and later branched out to include homes in Austria. 

Extra care is necessary when handling Pilkington Activ glass, and excessive contact with the coated surface should be avoided. Pilkington advises handlers to wear clean gloves at each workstation and to be cautious to not contaminate the coated surface with cutting oils or fingerprints after it has been cleaned. Harsh chemical cleaners, abrasives, steel wool or razor blades should not be used on the Pilkington Activ surface. However, hand cleaning can be done with household cleaning products such as Windex®. If spot cleaning is necessary to remove markings caused by grease, oil or waxy materials, Pilkington says products such as Acetone can be used. However, after being cleaned with detergents Pilkington Activ may need the sun’s exposure for several days to break down fully detergent residue and re-activate.

Eight window manufacturers and glass fabricators currently are offering Pilkington Activ, and the product is scheduled to be widely available later this year. Current Pilkington Activ distributors are: J.E. Berkowitz L.P. of Westville, N.J.; Champion Window Mfg. Co., Cincinnati; Downey Glass, Los Angeles; Floral Glass, Hauppage, N.Y.; Hartung Glass Industries, Tukwila, Wash.; Hoffer Glass FAB, Schofield, Wis.; Pacetter Corp., Omaha, Neb.; and Arch Aluminum Glass Co., of Kansas City, Kan. 
Pilkington guarantees Pilkington Activ to last ten years. Tests, however, indicate the product will last longer. The cost of Pilkington Activ windows is about 20 percent more than those with standard, clear glass.

 

Paolo Scaroni:The Man Behind the Glass
The ability to speak four languages must be a help to Paolo Scaroni, Pilkington’s group chief executive. Scaroni, who delivered the opening address at Glass Processing Days this past June, has many years of experience in the glass industry. 

Born in 1946, Scaroni has a degree in economics from the Università L. Bocconi in Milan, Italy, which he earned in 1968. Upon earning his degree, Scaroni began his professional career with Chevron where he worked until 1970 as a sales manager. He later joined Tyres, Batteries and Accessories as a supervisor and worked there from 1970-1971.

In 1972, he earned his masters degree in business administration from Columbia University in New York. He next joined the firm of McKinsey & Company as an associate, and stayed there until 1973.

His next career move took him to Saint Gobain in 1973. From 1973 to 1978 he held a number of positions there including financial director Saint Gobain Italy; general manager Balzaretti e Modigliani S.p.A.; president Borma S.p.A.; president air industries S.p.A. (all in Milan). From 1978 to 1981 he served as general delegate Saint Gobain Venezuela, Colombia, Ecuador, Peru (based in Caracas). And from 1981 to 1984 he served as general delegate of Saint Gobain’s Italian operations. It was in this position that Scaroni was appointed chief executive officer of all the Italian companies in the Saint Gobain Group. He also represented the company on the board of Olivetti S.p.A., as a non-executive director.

Saint Gobain then made him director of the company’s flat glass division, Paris. In this position he was responsible for the company’s worldwide flat glass activities. The position also included the roles of president and general manager, Saint Gobain Vitrage, France; president Fabbrica Pisana S.p.A., Italy; president Vegla, Germany; president of Cristaleria Española S.A., Spain and president Saint Roch, Belgium.

In 1985 he left Saint Gobain and joined Techint as executive vice president. During his tenure there he also served as executive vice president, Falck S.p.A., and managing director of SIV S.p.A.

In 1996 he took the role as Pilkington’s president automotive products worldwide. In April 1997, he was appointed director of Pilkington plc, and in May 1997 took on his current role.

In addition to his vast experience in the glass industry, Scaroni is a member of the board of overseers, Columbia Business School. He is also married with three children, and lists reading, skiing and golf among his hobbies.


USG

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